The federal government has funneled billions of dollars over the past two administrations into cutting carbon pollution from coal-fired power plants, but so far the “clean coal” dream is far from reality.

Officials have been chasing a best-of-both-worlds scenario: using abundant, cheap but relatively dirty coal for generating power, and then eliminating the “dirty” part by capturing carbon dioxide and other toxic emissions.

The captured CO2 can either be stored deep underground in geological formations in a process known as carbon capture and storage or piped out to oil and gas fields.

While the technology is there, it’s struggling to make its way into prime time. The reasons: It’s expensive, and there are no limits on carbon emissions.

Without climate legislation or new regulations that mandate the technology, companies don’t really have an incentive to deploy the technology on a commercial scale. And some experts say billions of federal dollars are still needed to make it more mainstream.

The likelihood that these problems can be solved in the near future is small. The days when the federal government greatly boosted funding for energy research, demonstration and deployment are most likely long gone; the Environmental Protection Agency, though it has proposed climate regulations for new power plants, currently has “no plans” to impose the same rules on existing plants; and there is zero political appetite for legislation that puts a price on carbon.

The Congressional Budget Office recently painted a grim picture of CCS’s future, saying the $6.9 billion provided by Congress to the Energy Department to demonstrate and reduce the cost of CCS has so far had little practical effect.

The CBO report, which was released last month, says it’s unlikely utilities will “invest in adding CCS technology to much of their existing capacity for many decades.”

“CBO’s analysis suggests that unless the federal government adopts policies that encourage or require utilities to generate electricity with fewer greenhouse gas emissions, the projected high cost of using CCS technology means that DOE’s current program is unlikely to do much to support widespread use of the technology,” the report says.

The report offers several recommendations for spurring CCS investment, including imposing a carbon tax, a policy that has almost no chance of gaining momentum on Capitol Hill.

The climate bill that went up in flames in 2010 amid opposition from Republicans and some industry groups would have invested heavily in making CCS commercially viable. “With the demise of these bills, the prospects of wide-scale deployment also went away,” said George Peridas, a scientist with the Natural Resources Defense Council’s Climate Center.

Instituting a regulatory driver is unpopular with those in Congress who question climate change or decry the Obama administration’s “war on coal.” But at the same time, advocates of coal — particularly given where the nation’s highest courts and the EPA stand on regulating carbon — can’t afford to let advances in CCS slip through their fingers.

“The technology is ready to go, but it’s not cheap. It doesn’t make economic sense yet,” Peridas said. “Congress is going to have to do something to fix that. If they do, then the technology is good to go, and it can be deployed safely.”

Peridas said the DOE program is “providing critical life support while CCS is in the doldrums.”

CCS research extends much further than demonstration projects, or even DOE — there are currently 68 ongoing carbon sequestration projects in 25 states and the District of Columbia, according to the DOE labs. Most are at universities or national labs.

And the efforts aren’t new. As far back as 1990, Southern Company Services Inc., the Electric Power Research Institute and Westinghouse Electric Corp. were researching capturing CO2, according to DOE’s National Energy Technology Laboratory.

There are six full-scale demonstration projects now under way in the United States, using about $2.2 billion of DOE funds. That doesn’t include local and state tax advantages, or $3 billion in authorized federal investment tax credits Congress carved out in 2005 and 2008 energy laws, the CBO report says.

Nevertheless, few are confident the technology will make headway soon.

“The DOE program cannot result in widespread deployment of the technology. This is beyond its scope,” Peridas said. “But the DOE can have an important role to play in demonstrating the technology at a time when the congressional and political reality wouldn’t support it and have it ready for when politicians wake up.”

A coal industry lobbyist added: “I think we’ll have CCS development at some point in time. It’s not going to happen anytime soon. Given these budget constraints, it’s hard for me to imagine getting any more money.”

For now, the lobbyist said, the industry is in a holding pattern, waiting to see what a second term for President Barack Obama or a first term for President Mitt Romney would bring.

“This election is really critical for the future of coal in this country. It all comes down to the election,” the lobbyist said.

Romney has favored the coal industry during his 2012 campaign and advocated against steering federal research funds toward projects that come up short on dividends. He also opposes EPA regulation of CO2.

Neeraj Gupta, a geologist and senior research leader at Battelle, which has worked on several CCS projects, said the federal government needs to invest “a lot more money to keep the momentum going.”

“I’m frankly concerned that especially with the pending budget reductions, that there will be a reduction of funding,” Gupta said. “We cannot afford to slow down.”

But even with DOE support, CCS is struggling in America.

The most commonly known U.S. government-backed project, FutureGen, has seen its share of political drama and financial woes.

President George W. Bush launched FutureGen in 2003, intending to build a government-backed zero-emissions coal-fired power plant that produces electricity and hydrogen while capturing and storing CO2.

The project landed in Mattoon Township, Ill., in 2007 and subsequently encountered several years of financial woes and reshuffling as federal funds fell away under Bush. Money returned under the Obama administration, with $1 billion in the Recovery Act. Along the way, the city of Mattoon, as well as four power companies — American Electric Power Service Corp., Luminant, PPL Energy Services Group and Southern Company Services — dropped out.

Early this year, the alliance of remaining companies involved sold Mattoon land — originally purchased for $3.5 million — back to its original owner for $700,000.

And even more recently, the largest government-backed commercial-scale carbon capture plant, under construction in Kemper County, Miss., hit on financial troubles after a local utility commission denied a rate increase request. Southern Co. and its subsidiary Mississippi Power are still trying to determine a way forward, after spending more than $1 billion — $245 million of it DOE grants.

Though current prospects for commercial-scale CCS are murky, Southern Co. is on to something: The future of coal almost necessarily includes less CO2 emissions.

In late June, on the three-year anniversary of the House’s passage of the Waxman-Markey bill, a federal court broadly backed EPA’s decision to regulate greenhouse gases and the climate-change science behind it.

EPA’s air administrator Gina McCarthy was asked during a House hearing in June if the agency would move beyond its current requirements for cars and future power plants. The answer? “It’s not no,” she said.